Opportunity Zones in Florida to buy and sell homes

Opportunity Zones – If you haven’t heard of them, you must be new to the property investor scene in South Florida.

The Opportunity Zone is a federal tax incentive program that was added to the tax code by the Tax Cuts and Jobs Act on December 22, 2017. The program allows investors in economically distressed communities to benefit from preferential tax treatment if certain conditions are met. Instead of investors being liable for tax on realized capital gains, they can re-invest their capital gains into Opportunity Zones, and achieve substantial tax savings.

The Opportunity Zones in Miami-Dade County and Florida were certified by the U.S. Treasury on June 14, 2018. Miami-Dade has 67 Opportunity Zones, more than any other county in Florida.

Opporunity Zones and Benefits for Investors and Developers

Opportunity Zones in Florida are intended to spur on investors in the following ways:-

1. Deferring tax on any prior gains invested in a Qualified Opportunity Fund (QOF) until the earlier of the date on which the investment is sold, or December 31, 2026.   
2. Reducing tax by up to 10% if the investment is held in the QOF for longer than 5 years, of 15% if held for more than 7 years.
3. Avoiding capital gains completely if the investor holds the investment in a QOF for at least ten years.

Developers can benefit from opportunity zones in Florida using private investor funds as they can borrow using cheaper capital. They can drive better development returns as investors can defer, reduce and avoid capital gains on investment monies.

Local Opportunity Zones

A full list of Florida Opportunity Zones can be found by tract and by map.

Miami-Dade County has Opportunity Zones that span Opa-Locka, Overtown, North Miami Beach, Carol City, Aventura, Edgewater, and the Design District.

Broward County has two Opportunity Zone designations in Hollywood, “Liberia,” Oakwood Plaza, South Florida Design & Commerce Center, and “Young Circle,” Hollywood Boulevard, South Federal Highway.

Deadline to benefit from investment in Opportunity Zones

In order to qualify for the 15% tax benefit, the qualified opportunity zone investment must currently be made by December 31, 2019. This means investors need to act quickly to take advantage of this program. If they invest after Jan 1, 2020 (and for 2 years thereafter), they would continue to qualify for a tax benefit on deferred capital gains, but in the reduced sum of 10%.